LETTERS TO THE EDITOR

I am writing to respond to the opinion column by Stephen Z. Ballen, "CPA ethics crisis: taking money manager kickbacks" (July 26). Although I can appreciate Mr. Ballen's opinion regarding the relationship between CPA and brokerage firms and money mangers, I do not agree that he has painted a completely accurate or comprehensive picture of these relationships.

Over the past several years, there have been many changes within the CPA profession, including new professional affiliations, consolidations and reorganizations within many CPA firms. From the beginning, the CPA profession has discussed and reviewed these new relationships and changes in order to implement appropriate guidelines and standards. This includes reviewing and evaluating the issue of CPAs entering into a relationship with other professionals/organizations in order to provide their clients with high-level and high-quality investment management services.

The ethical guidelines have always been clear within the CPA profession: Rules of conduct dictate that the client must be informed of the relationship between the CPA and the brokerage firm or money manager. CPAs who enter into such relationships conduct their own "due diligence" to ensure that the interests of their client are being upheld.

The trust relationship between a CPA and their client is one that has always been highly regarded by the public. Upholding those standards in the face of outside influences is the hallmark of the CPA profession, and one not taken lightly.

Theodore R. Mandigo

President

Illinois CPA Society

. . . POORLY INFORMED

I question Stephen Ballen's article, as it seems "grossly flawed" because of his lack of knowledge on the subject. I am a CPA who has offered clients investment advice since 1993, and CPAs have been advising individuals for over 100 years on individual financial matters.

Most of the arrangements that Mr. Ballen referred to are legal and productive. The client usually does not pay any more in fees, and the client is always informed that the CPA is "sharing" the fees with the adviser.

The key to the relationship is that the CPA does not just leave the client to the broker or the adviser, but also monitors the client's portfolio and makes sure that they have an input into the investment policy statement prepared for the client.

CPAs who participate in these arrangements spend lots of time and money to do their own "due diligence" to make sure the firms that they engage to advise their clients have the same high standards that they have when they give their clients advice.

I hate to see people write about anything or anybody when they are not properly informed on the subject or are just plain jealous of other practitioners and how they make money.

Sharing of fees has been going on for a long time, and as long as the client is not being charged more than they would if the adviser were performing the services with the introduction of the CPA, there is really a service being performed by both parties.

Dennis R. Kroner

President

Pitt Ryan & Linnear Ltd.

Chicago

GETTING ON TRACK

Recently, we were dismayed to learn that our major transit agencies are feuding for federal dollars ("Squabbling transit chiefs risk missing fed funding ride," July 12).

If we had three operating agencies acting as one regional transit system:

* Riders would be able to use one universal fare card for rapid transit, commuter rail or bus.

* Commuters would be able to board Metra trains at more Chicago locations for the "reverse commute" to suburban jobs.

* Transfers between Metra and Chicago Transit Authority (CTA) trains would be easy.

* Job centers would be served by Pace vans or shuttle buses from Metra and CTA stations.

* Transit signs, schedules and maps would be coordinated.

The General Assembly unanimously adopted House Resolution 234 calling on the Regional Transportation Authority to develop the regional transit plan by yearend. The early signs are good that we're on our way to achieving a cooperative, coordinated regional transit system.

Julie Hamos

State representative

18th District

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